Dish leapfrogs Sprint with aggressive new bid for Clearwire

Dish Network has boosted its bid for Clearwire to $4.40 per share, 29 percent above Sprint Nextel’s most recent offer, and said it is prepared to buy up the stock of a minority of shareholders.

In a letter sent Wednesday to Clearwire Chairman John Stanton, Dish said its board had approved the offer and it was prepared to execute the deal. On Friday, Clearwire plans to hold a special shareholder meeting to consider Sprint’s offer to buy out the roughly half of the company that it doesn’t already own.

Dish’s aggressive new bid might throw a curve into Clearwire’s path to a decision on Sprint’s proposal by offering another choice to shareholders who oppose Sprint’s offer.

Late Wednesday, Clearwire said it was reviewing the new offer. Sprint declined to comment.

“The Special Committee of Clearwire’s board of directors has received Dish Network’s offer and will review it to determine the best course of action for the company and its stockholders. The Special Committee has not made any determination to change its recommendation of the current Sprint transaction,” the company said in a statement.

Sprint intends to take over Clearwire in conjunction with a $20 billion investment by SoftBank, which plans to take over 70 percent of Sprint. A U.S. agency governing foreign transactions approved SoftBank’s plan on Wednesday. Sprint has used Clearwire as its partner for WiMax services and intends to take advantage of the smaller carrier’s major spectrum holdings to fill in its LTE network.

Just last week, Sprint increased its offer from $2.97 per share to $3.40 in an effort to win over Clearwire shareholders from Dish’s overtures. The special meeting, which had been set for last week, was then postponed to its new date on Friday.

With its new offer, Dish said it is willing to buy shares from a minority of Clearwire’s shareholders even if it can’t buy out the company. The threshold for making that possible would be at least 25 percent of the company’s voting stock, Dish said. If it got the minority stake, Dish said it would need the right to name at least three members to Clearwire’s board, plus other conditions including some “minority protection rights” such as the right to approve transactions with other parties, including Sprint, the letter said.

Dish’s deal is conditioned on termination of a funding arrangement under which Clearwire has been drawing $80 million per month from its partner company over the past few months. As part of its offer, Dish would provide a financing package that would let Clearwire draw down the same amount per month up to a total of $800 million.

Dish also said it is prepared to separate the offer from its earlier proposed acquisition of 40MHz of Clearwire spectrum.

The decision on a suitor for Clearwire depends on the owners of the roughly half of the company’s shares that don’t belong to Sprint. About half of those remaining shares are held by Comcast, Bright House Networks and Intel, original Clearwire partners that have said they are committed to voting for Sprint to take over the company. The remaining minority shareholders include some, such as Crest Financial, that have fought Sprint’s offer.